The black swan of a rail strike is flying high as the U.S. Congress prepares to act if workers walk out.
Lawmakers are under pressure to avert a rail worker strike as soon as this week that would batter the nation’s economy just before November’s midterm elections.
Republican senators introduced a resolution to impose a new contract if negotiations between railroads and unions collapse, while Democrats say they would pass legislation to block a rail shutdown if necessary.
…Business Roundtable CEO Joshua Bolten said Tuesday that the big business group is “deeply concerned about the potential for economic catastrophe” if talks are not resolved by Thursday night.
The U.S. Chamber of Commerce wrote in a letter to congressional leaders that it is “not confident” that additional time to negotiate will lead to a breakthrough between unions and railroads.
“The negative impact of uncertainty is already being felt, and even a short strike or disruption would be disastrous,” said Brian Dodge, president of the Retail Industry Leaders Association, which represents big box stores. “Jobs will be lost, and costs will go up as shortage of raw materials and consumer goods ripples throughout the economy — it will be a double whammy.
Rail companies are already preparing for a strike.
As negotiations continue, Norfolk Southern is making preparations in case workers strike.
Norfolk Southern has begun enacting its contingency plans for a controlled shutdown of its network at midnight this Friday. Although negotiations continue, they say they have a commitment not to strike.
In an update Norfolk Southern posted online, they say their goal is to ensure that in the event of a work stoppage that they have a contingency plan for crews, equipment, and freight to safely reach their destinations with minimal disruptions.
Effective 12:00 (noon) local time on Wednesday, September 14, 2022, Norfolk Southern will close all gates to Intermodal traffic.
Another firm, CSX, is taking steps to ensure the safety of highly hazardous materials crucial for the industry.
We remain hopeful that agreements will be reached, but to prepare for the possibility of a work stoppage the company will take action by issuing an embargo on all TIH/PIH shipments and other safety-sensitive freight effective Monday, Sept. 12.
CSX will work to ensure compliance with federal regulations and avoid the potential of safety-sensitive and hazardous materials being left unsecured or unprotected. In addition, we are advising all customers that delays and service suspensions are possible if the impasse in labor negotiations continues.
U.S. passenger railroad Amtrak has canceled trips on three long-distance routes.
Tuesday departures for the Southwest Chief, Empire Builder, California Zephyr, and a portion of the Texas Eagle routes have all been pre-emptively canceled in order to avoid passenger disruptions, an Amtrak spokesperson told Insider.
If freight rail carriers do not reach a resolution with two major worker unions, shorter state-supported routes could also be canceled this week, the spokesperson added.
While Amtrak itself is not involved in the union negotiations, its trains travel on 21,000 miles of track throughout the Midwest and western US — nearly all of which is owned, maintained, and controlled by freight railroads. As a result, a freight rail worker strike would “significantly impact intercity passenger rail service,” Amtrak said.
- Gasoline: Without freight railroads, oil refineries would have trouble producing their current volumes of gasoline, which could send gas prices higher, ending a string of three months of falling prices at the pump.
- Food: It could disrupt the nation’s food supplies, preventing recently harvested crops to move to food processors and disrupting the supply of fertilizer needed for upcoming plantings.
- Consumer goods: According to the National Retail Federation, Any rail strike could have long-lasting negative effects on the import of goods for the holiday shopping season, causing shortages and higher prices.
- Cars and trucks: Car prices have already hit record prices this year due to the limited supply of new vehicles caused by a shortage of computer chips and other parts. A rail strike would further choke supplies, cutting off the delivery of auto parts to auto assembly plants, which could force temporary shutdowns at some plants. It would also disrupt the flow of completed new cars and trucks, 75% of which move by rail.
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